The WACC of Global Brokerage Inc (GLBR) is 13.0%.
| Range | Selected | |
| Cost of equity | 11,693,932.80% - 26,325,601.40% | 19,009,767.10% |
| Tax rate | 20.70% - 24.60% | 22.65% |
| Cost of debt | 9.20% - 23.90% | 16.55% |
| WACC | 7.5% - 18.5% | 13.0% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 2.54215846e+06 | 4.70099938e+06 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 11,693,932.80% | 26,325,601.40% |
| Tax rate | 20.70% | 24.60% |
| Debt/Equity ratio | 5.199016667e+07 | 5.199016667e+07 |
| Cost of debt | 9.20% | 23.90% |
| After-tax WACC | 7.5% | 18.5% |
| Selected WACC | 13.0% | |
The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.
This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.
Here’s how we figure out the cost of equity for GLBR:
cost_of_equity (19,009,767.10%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (2.54215846e+06) + risk_adjustments (0.25%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.